Correlation Between Citigroup and Southstone Minerals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Southstone Minerals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Southstone Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Southstone Minerals, you can compare the effects of market volatilities on Citigroup and Southstone Minerals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Southstone Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Southstone Minerals.
Diversification Opportunities for Citigroup and Southstone Minerals
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Southstone is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Southstone Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southstone Minerals and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Southstone Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southstone Minerals has no effect on the direction of Citigroup i.e., Citigroup and Southstone Minerals go up and down completely randomly.
Pair Corralation between Citigroup and Southstone Minerals
Taking into account the 90-day investment horizon Citigroup is expected to generate 165.11 times less return on investment than Southstone Minerals. But when comparing it to its historical volatility, Citigroup is 108.9 times less risky than Southstone Minerals. It trades about 0.13 of its potential returns per unit of risk. Southstone Minerals is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Southstone Minerals on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Southstone Minerals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Southstone Minerals
Performance |
| Timeline |
| Citigroup |
| Southstone Minerals |
Citigroup and Southstone Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Southstone Minerals
The main advantage of trading using opposite Citigroup and Southstone Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Southstone Minerals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Southstone Minerals will offset losses from the drop in Southstone Minerals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Southstone Minerals vs. Maple Peak Investments | Southstone Minerals vs. Birchtech Corp | Southstone Minerals vs. Constellation Software | Southstone Minerals vs. Ocumetics Technology Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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